- After years as a mine builder, Don Hyma is planning his next major development at copper junior Caravel Minerals
- Adani-backed project will be one of the largest copper mines in Australia once built
- Stock is surging as copper price rises to record highs on supply shortage
Don Hyma’s name is well known in the mining industry.
But the well-spoken Canadian is an unusual figure to be seen at the small end of town.
Flip through the pages of his tome-like resume and the bounty of experience is palpable – with boots both on the ground and in the C-suite at Rio Tinto (ASX:RIO), Fortescue (ASX:FMG) and Mitsui.
Take a step back and two decades at Falconbridge, now part of Glencore, including a role spearheading the construction of the massive concentrator at the Collahuasi copper mine in Chile – one of the world’s three largest copper producers.
That mine is now at the centre of two of the biggest (proposed) M&A deals in mining history – Anglo American and Glencore each own 44% alongside a subsidiary of Mitsui, and Anglo shareholders have already approved a US$53bn tie-up with the majority owner of the nearby Quebrada Blanca mine Teck, while Glencore is in the cross-hairs of Rio.
Unlike many junior company heads, Hyma is a mine and infrastructure builder. That was one of the attributes that made the unconventional union with micro cap copper developer Caravel Minerals (ASX:CVV) a marriage made in heaven when he parlayed his role as a technical advisor into the managing director’s chair in 2023.
Caravel’s main game is a giant low grade porphyry around 90 minutes’ drive inland from Perth, which stands to be the largest new copper mine developed in Australia since OZ Minerals completed construction of the now BHP (ASX:BHP) owned Carrapateena in 2019.
And with copper prices at record levels in the orbit of US$13,000/t, the timing of a new definitive feasibility study due later this year could not be better.
“We’re seeing supply disruptions of these old mines around the world and at the same time, we’re seeing demand in copper over the next 10 years like we’ve never seen demand before,” Hyma said.
“And it is largely driven by decarbonisation and renewables and things like AI centres and wind turbines, electric vehicles, et cetera – things that didn’t exist 25 years ago are very much underpinning the forward looking demand.
“So we’re seeing this perfect storm of declining supply and very robust demand.”
The Pilbara of copper
Given his past working on Collahuasi, it would be tantalising to make links to Caravel’s future development.
Hyma and many members of his team have indeed been there and done that before. But the projects are very different in nature.
A bonafide tier-1 deposit, Collahuasi pumps out around 600,000t of copper per annum at a grade of ~0.9% Cu, very high these days for a porphyry.
But Caravel has its own charms. Expected to run at a rate of +60,000tpa for well over 20 years based on numbers disclosed in a previous study, the project runs at a far lower grade of 0.24% Cu – or a higher 0.27% in its important ramp up years.
Yet there are distinct advantages for Caravel. Its distance from Perth makes it a prime candidate as a drive in drive out or even residential operation and at a strip ratio of 1.22:1, or 0.64:1 in its first five years, Hyma says the economics make its extraction more like the low-lying bulk iron ore mines of the Pilbara than the mountainous Andean projects of Chile, Peru and Argentina.
Those same environmental factors make the future mine a prime candidate for automated trucking, pulling further costs out of the system and enabling some employees to work closer to home in Perth.
“It’s the copper equivalent to the big iron mines in the Pilbara and we know how to reduce our costs by going to scale, but also by multiplying automation,” Hyma said.
“We have ways of reducing costs, and by virtue of a bulk mine we can scale up the operation, and that’s what creates the profit margin for a project like Caravel,” Hyma said.
“The iron ore guys do exactly the same thing. They lower their cutoff grade of iron ore, they go to as high a scale as they can, and they create massive profit margin to earn their shareholders the returns that they’re expecting.
“We’re not the Pilbara in money terms, but certainly the concept applies for us.”
Copper valuations soar
With prices surging to record highs and expectations of continued demand growth, just about every major has set out their stall in the copper sector.
That has placed a premium on valuations, with BHP (ASX:BHP) CEO Mike Henry suggesting tier-1 copper producers clocked in at around US$50,000/t copper intensity equivalent.
CRU Group principal copper analyst Robert Edwards thinks a compromise will be met at around US$40,000 for tonne of annual copper production with ASX-listed Sandfire Resources (ASX:SFR) – a second-tier player by global standards – already clocking in at around US$39,000/t on its current valuation.
At a market cap of $230 million, that suggests Caravel has plenty of room to run even after a 156% gain in the past six months, given its planned production rate of +60,000tpa.
In 2024, Rex Minerals was poached by Indonesia’s MACH for $393 million for South Australia’s Hillside copper project. While more advanced than Caravel and shovel ready, its planned production rate will be less than half of the Caravel development.
The run in Caravel’s share price has all been about copper price so far, Hyma said. Around 80% of CVV’s future revenues will come from the Red Metal once molybdenum and precious metals credits are accounted for, making the firm strongly leveraged to the commodity’s performance.
Canaccord’s Paul Howard put a 60c price target on the stock last year when it was trading at under 20c, since when CVV’s share price has more than doubled and copper prices have lifted over 40%.
The Indian copper boom
Given its scale, the 3Mt Caravel will come with a large capital bill, estimated in its 2022 pre-feasibility study update at $1.6bn.
But there is already strong momentum to potentially secure a joint venture partner for what will be a +billion dollar development, after a subsidiary of Indian conglomerate Adani signed a non-binding MoU establishing a framework for company and project level investments as well as a life of mine 100% offtake for its copper concentrate.
It comes after Adani opened a 500,000tpa copper smelter in Gujarat last year, one of the world’s largest copper factories. Plans are already in place to double its capacity by early in the next decade as India emerges as the next global growth centre after China.
That places Caravel in pole position as copper smelters scramble for supply amid a shortage of concentrate. Spot smelter TC/RC charges have turned negative, meaning some smelters are being forced to pay miners to refine their product, an untenable situation.
“It’s not just a smelter. I stood there and watched the copper cathodes being stripped off the starter plates, as they call them, in the actual casting room or in the cathode part of the facility,” Hyma said after visiting the facility last year.
“Those cathodes then just get trucked out one door into the next door. They remelt them and they make wire rod and all sorts of down the stream shapes and materials needed for car manufacturing, for example, or for wire or for transmission lines.
“All of their copper production is being consumed in India.”
In India, companies like Adani are “building the Pilbara, which took 50 years, in 25,” Hyma said.
“They’re not really interested in us for the existing smelter because we don’t come online fast enough.
“But for the announced expansion, doubling to a million tonne a year copper production, we are very much of interest to them.”
2026 a key year
Hyma has stressed that the big focus for Caravel is that every aspect of its DFS is done right, ensuring the project is on a solid footing before a final investment decision is made.
A host of workstreams are planned this year to push the project along that virtuous path.
Adani is expected to travel to site at the end of January 2026 for due diligence ahead of the signing of a binding term sheet expected this quarter, with engagement is progressing with export credit agencies to explore financing structures for the eventual project construction.
The final land purchase option agreement for the Bindi deposit has been executed already, a milestone that lays the foundation for the granting of a mining lease and general purpose leases covering the open pit mine area at the Wheatbelt site.
An updated JORC reserve is planned for release this year as well as part of mining studies by Byrnecut’s Mining Plus, with engineering studies for the DFS significantly advanced and an environmental review document due for resubmission in mid-2026.
Caravel is expected to have a unique water source, enhancing the environmental credentials of the project.
It plans to extract saline groundwater unsuitable for use by farmers which has the added benefit of improving copper recoveries in the mill.
That saline groundwater kills vegetation after winter rain, meaning Caravel could turn the mine into a net positive for the environment even before its product’s use in EVs and renewable energy is taken into account.
“The very unique opportunity we have on this project is … by virtue of us drawing down that water table, we’ll be able to over time start to reverse that surface damage that’s occurring to vegetation,” Hyma said.
“But at the same time, we’re getting the water that we need for the process plant.”
